The year is halfway over – and if you’re like most small business owners, you’ve been too busy working in your business to spend much time working on it. But now’s your chance to hit pause, zoom out, and do a quick financial check-in before Q4 sneaks up and holiday chaos takes over.
Taking a couple hours to review your numbers, spot red flags, and course-correct mid-year can prevent stressful surprises at tax time. It also has the added benefit of putting you back in control of your business finances.
With that being said, here’s a mid-year financial checklist designed to help you finish the year strong.
- Review Year-to-Date Cash Flow
Start with the basics: How is your cash flow?
You don’t need fancy reports to get clarity here. Just look at how much cash has come in and how much has gone out since January. Are you consistently cash-positive? Or are you dipping into reserves more often than you’d like?
If cash is tighter than expected, dig into:
- Late-paying clients or slow receivables
- Recurring expenses you’ve stopped questioning
- Any subscriptions or vendors you’re no longer using
Cash flow tells you whether your business can keep running day to day. If something feels off, don’t ignore it, as fixing a small cash leak now is a lot easier than digging yourself out of a hole later.
- Reevaluate Your Budget and Adjust Forecasts
Pull out the budget you set at the beginning of the year and compare it to reality. What’s overperforming? What’s lagging behind?
Maybe your marketing spend is higher than planned, but your customer acquisition is also up. Or maybe you budgeted for a new hire in Q2 but never made the move. Whatever the story is, use it to adjust your Q3 and Q4 forecasts.
Your budget is a living document. Updating it now keeps you grounded and helps you make sharper decisions heading into the back half of the year.
- Check In on Estimated Taxes
If you’re making money, the IRS wants their piece – and they don’t wait until April.
By now, you should have made at least two estimated tax payments for the year. If your income has increased (or dropped), your estimates might need to be updated. Missing payments or underpaying can lead to penalties, so this is a good time to review where you stand.
Don’t guess here! Loop in your bookkeeper or financial planner if needed, and get your tax plan locked in for the rest of the year.
- Reconcile Accounts and Clean Up Your Books
Messy books lead to bad decisions. If you’ve fallen behind on reconciling bank statements or categorizing transactions, now’s the time to catch up. You should make sure:
- Your business checking and credit card accounts are fully reconciled
- All income and expenses are properly categorized
- Open invoices and unpaid bills are accounted for
Clean financial data gives you clarity. And that clarity helps you run your business with confidence.
- Review Retirement Contributions and Employee Benefits
If you have a SEP IRA, Solo 401(k), or any other retirement plan for your business, check how much you’ve contributed so far. If business is booming, increasing your contributions can reduce your taxable income and help you build long-term wealth at the same time.
If you offer employee benefits – like healthcare, 401(k) matching, or profit-sharing – make sure everything is running smoothly. Are contributions being processed correctly? Are your employees taking advantage of what you’re offering?
Use this mid-year check-in to catch errors and look for ways to increase the value of your benefit programs (without necessarily increasing cost).
- Assess Pricing and Profit Margins
Have your costs gone up this year? Are your prices keeping up?
If you haven’t reviewed your pricing lately, now’s the time. Look at your gross profit margins across products or services. Are you charging enough to stay profitable? Are there hidden costs eating away at your margins?
Don’t wait until year-end to realize you’ve been underpricing. A mid-year pricing adjustment – even a small one – can make a big difference in your bottom line.
- Spot Red Flags Early
This is also the time to look for early signs of financial trouble. Watch for increasing debt without any clear repayment plan. You’ll also want to keep an eye out for declining revenue, customer churn, and high overhead costs (relative to income).
Catching these issues now gives you time to fix them before they snowball. Don’t ignore that nagging feeling in your gut. If something doesn’t look or feel right, dig into it. You’ll thank yourself later.
- Set Clear, Focused Goals for Q3 and Q4
After reviewing the data, it’s time to set some goals – not vague resolutions, but clear, measurable outcomes.
Ask yourself proactive and thoughtful questions like:
- What’s one thing I can do to improve profitability?
- Where can I reduce expenses without sacrificing value?
- What would a “strong finish” to the year actually look like?
Write these goals down and share them with your team. From there, break them into weekly or monthly actions that keep you moving forward.
How Are You Doing?
Hopefully, this has been a wake-up call for your business finances. If there are any areas where you lack clarity or have some confusion about how to proceed, this is where it’s helpful to partner with a financial planner who specializes in working with small business owners. They can get you pointed in the right direction.
